The 2016 complete guide to list segmentation

In the modern market, a one size fits all marketing solution is no solution at all. The foundation of a solid marketing strategy is a well-defined target market. When it comes to email marketing, list segmentation is the best tool for dissecting your consumer base. By taking this approach, you put the right message in front of the audience most likely to relate and respond.

Coming from an email marketing expert, this may just sound like a ploy to convince you to spend even more time on your efforts, but others in the industry agree. A 2015 case study by MarketingSherpa found that proper list segmentation increased open rates by 20 to 40 percent, with a subsequent rise in click-through rates.

To give some perspective, the average open rate for email campaigns is approximately 22.5 percent, with slight variations across different industries.

Understanding List Segmentation

Segmentation offers the ability to divide your main list(s) into different sub-groups. For small businesses, this works well when it comes to sending campaigns about specific products, services, or offerings. It gives you the chance to reach customers who are most likely to engage with the featured CTAs (calls to action) and sets them up to easily convert into a purchase.

While you’ll probably want to email all customers with information about major changes to your business or brand, regular email campaigns should always include segmentation.

Advantages of Segmentation

There are significant advantages to segmentation that you can benefit from when creating messaging and promoting products, including:

⇢Potential for Increased Sales & Brand Engagement

Capitalize on special offers by targeting customers that you know are likely to purchase, especially when a product is in demand. If you’re a tax auditor, for example, send a campaign in early April. Remind people to file and offer your services if they’re procrastinating because they feel lost in the process. For retailers already offering spring/summer collections, target customers where temperatures are unseasonably warm in the last weeks of winter. Businesses that are service-focused can create how-to’s or useful tip sheets that provide value for readers as well.

⇢When You Want to Give Back To Your Customers

When you’re looking to reward customers, segmentation can make it easier to separate first time buyers from repeat customers. Send a welcome email with a promo code to newbies, and a different campaign to your most loyal customers. Each month, choose an email campaign and send all responders a ‘Thanks So Much’ email that acknowledges you appreciate them reading your content.

Planning a new product launch? Reach out to a list of frequent buyers on your list and send them an exclusive sneak peek purchase link.

Another interesting tidbit: Segmentation also plays a vital role in keeping your emails out of the spam folder. Because your lists have been tailored more specifically when you segment, you’ll be less likely to send duplicate copies or mail anyone who’s previously unsubscribed.

Best Practices for Segmentation

There are many ways to implement segmentation. Create a list of loyal customers and send them an exclusive discount code. For list members who don’t interact with your original email, add them to a follow-up campaign. Send your most active newsletter readers an exclusive piece of content straight to their inboxes.

Other common ways to segment include:

⇢Geographic Region

Segmentation by geography is one of the most common methods becauses it gives business owners the opportunity to communicate and talk to customers where they are. This route is especially valuable for anyone with an online store that may have shoppers nationwide or in other countries. However, for those with limited geographic reach such as restaurants or professional cleaning services, consider segmenting by city or town instead of broader measurements like state.

⇢Customer Behavior Patterns

Another common way of segmenting lists, look at the behavior of your customers and then divide based on those who took action and those who did not. This could be a list of buyers and non-buyers, readers and non-readers, or even based on those who opened your email, but never clicked on any links. You can decide whether to add those who interact less with your emails to their own list and include a bit more personalization to encourage a response.

⇢Level of Interest in Your Business

The classic ‘Hot, Warm, Cold’ method is one that most professional marketers swear by because it allows you to segment your lists by level of interest in your products, services, or brand and helps keep an organized, clean contact database. Whether you’re attending an event or collecting signup information from your audience online, include a question or two that gives the respondent an opportunity to indicate their likeliness to buy, and in what time frame. For hot leads, add them to a list and send an offer immediately.

Build a lead nurture stream and establish a longer term relationship with warm and cold leads as they work their way through the decision-making process.

Don’t Have a VerticalResponse Account Yet?

Segmentation & Your VerticalResponse Account

When it comes to segmentation in your VerticalResponse account, there are many options for creating targeted lists and tailoring your message to the right audience for email marketing success.

⇢Activity-Based Segmentation

Use predetermined parameters on your list related to opens and clicks to segment and create campaigns for both avid readers and unengaged customers alike. VerticalResponse offers activity-based segmentation focused on Search, Logic, and Time Frame.

Look for people who opened or did not open and people who clicked or did not click.

⇢Logic

Find Any Email, All Emails, or Specific Emails you’ve sent.

⇢Time Frame

Gain perspective on interactions by looking at what happened in the last seven days, last month, and last six months.

⇢Personalized Segmentation

Personalization helps add a unique touch to any email marketing campaign by addressing readers directly. In addition to increasing the ‘wow’ factor for your customers’ inboxes, statistics also show that personalized messages help increase opens, click throughs, and push users to answer CTAs.

Known as Use Cases, these parameters let you take a deeper dive into your list by looking at the following:

⇢Targeting by Location

Use this type of segmentation to search for customers by Country, State, Region, or Zip Code. This allows you to send promos for free shipping to select areas or an event invite for local customers. In the example below you’ll find results for any contact with the State field of California.

⇢Targeting by Birthday

Celebrate your customers’ special day with a themed added value gift or ‘Happy Birthday’ email. Use targeted birth segmentation where you can search by date of birth, year of birth, or even the age of your customers.

⇢Targeting by Phone Number

Want to get in touch with your customers quickly? Conducting a short survey or looking for feedback? Our phone number segmentation use case gives you the chance to locate customers by their Home, Work, Mobile, or Fax numbers.

Watch personalized segmentation in action in this two-minute video:

The Problem With Too Much Segmentation

While segmentation typically works in the favor of marketers aiming to target, personalize, and reach audiences with specific messages, like anything else, too much of a good thing can often make things worse.

Consider that segmenting for every campaign is probably not always necessary. There may be times where you’ll want broader audiences to see what you have to offer. Also, in terms of timing, for each segment, you’ll need to create a certain level of original content or messaging. Think about your bandwidth and how this might impact other projects in the grand scheme of your goals.

Coming Soon: Select Conditions Use Case Segmentation

This spring we’ll be adding another Use Case known as ‘Select Conditions’ which will offer you the opportunity to search your list based on different conditions through ‘and/or’ and ‘all’ statements to find customers that match the exact parameters of your requirements. Here’s a sneak peek:

While the release is still a few weeks away, you can get started with your ideas for how you’ll take advantage of this exciting new feature and how it can improve your segmentation goals for the rest of the year.